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Sri Lanka to review performance of open economy policies introduced from 1977

Jan 04, 2021 (LBO) – Sri Lanka will review the performance of the open economy policies introduced from 1977 allowing the country to follow a focused approach to becoming an industrial economy.

Introducing the monetary and financial sector policies for 2021, the Central Bank Governor W D Lakshman said that a policy framework with long-term objectives would generate greater macroeconomic benefits than being driven by short-term vicissitudes in the market and unbridled desire for short-term gains.

"Monetary policy will be reoriented towards supporting the identified sectors of the economy, and lending targets to priority sectors and winning industries will be introduced during the year, following consultation with relevant stakeholders," Governor W D Lakshman said.

"Overall, while working within a framework of market economy, the performance of the open economy policies introduced from 1977 will be reviewed vigorously."

In accordance with the policy framework outlined in the ‘Vistas of Prosperity and Splendour’ and the Budget 2021, the Government has provided policy support to improve domestic production, particularly in Agriculture and Industry sectors.

"These fiscal stimuli and incentives would help expand the domestic capital base, improving domestic supplies. These developments would reduce the import dependence of the country, enhancing domestic production ratios in agricultural and industrial supplies," he said.

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"These features of the new macroeconomic policy framework will be incorporated into economic management decisions of the Central Bank more closely, to ensure a coordinated approach to pushing the country on to a rapid growth path and sustained prosperity.

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Full Speech

CBSL-Road-Map-2021_English_04012021

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